Australia: National Infrastructure                           

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Overview:

The development of telecommunications in Australia has been dominated by the need to provide services to a population congregated in cities separated by long distances, while reaching remote areas with basic services and linking the cities with high capacity services.  The telecommunications services market in Australia is significant, contributing more than five percent to Australia's GDP. It is a sophisticated and developed market, yet offers opportunity for growth in certain sub-sectors. Generally, there are opportunities in the areas of broadband access, data communications services and content provision.

Telecommunications services in Australia include:
Fixed telephone services; Mobile services; Data services (including online services, value-added voice services, voice mail, email); Broadband services (including high-speed Internet, interactive services); Interactive television, games, digital TV; Content providers; e-commerce and Mobile commerce (or M-commerce).

Over the last decade, the Australian telecommunications industry has evolved from a single carrier to a dual carrier and finally a multiple carrier service provider structure.  Since deregulation in 1997, the telecommunications market has experienced a period of rapid growth.   Australia’s roughly 18.5 million population use about 10 million copper phone lines.  This equates to 525 phone lines per 1000 people [43].

The telecommunication services industry is made up of businesses mainly providing telecommunication services to the public by wire, cable or radio. The primary activities of the industry include cable and communication channel services, network communication services, operation of radio relay stations, satellite communication services, telecommunications, telephone services, teleprinter and telex services, and operation of television relay stations.

On 1 July 1997, the Australian Communications Authority (ACA) was formed by the merger of the Australian Telecommunications Authority and the Spectrum Management AgencyThe ACA licenses telecommunications carriers, ensures compliance with carrier licence conditions and service provider rules, and monitors service performance and quality. The ACA also administers legislative provisions relating to powers and immunities of carriers in the construction of telecommunications facilities, and protection of consumers through safeguards and service guarantees. The Universal Service Obligation (USO) is administered by the ACA to ensure reasonable and equitable access across Australia to standard telecommunication services. Under the USO, Telstra is obliged to ensure that standard telephone services and pay phones are reasonably accessible to all people in Australia on an equitable basis, wherever they reside or carry on business [3].

Present Fixed Infrastructure:

The telecommunications industry in Australia has boomed over the past five years. However, the rate of future growth is likely to be more modest. Several of the 84 carriers currently operating in Australia are facing financial difficulties due to their inability to recoup the large investments made in infrastructure because of strong competition in the telecommunications services market. Several telecommunications companies have failed, including Nextgen and IPI in 2003 and New Tel in 2002.

The present fixed line network can be seen as having two components consisting of the backbone carriage network, also known as the Public Switched Telephone Network (PSTN) ,and Customer Access Networks (CAN).  The backbone network is composed of optical fiber cables which connect exchanges between cities and states.  The CAN, or local loop, comprises of mostly cables (usually copper wire pairs) that connect customers to their local exchange.  Some of this network in rural and remote parts of Australia use technologies such as radio and satellite.  This CAN network is predominantly owned by Telstra with 90% of the market followed by C&W Optus with 6%.  With regards to DSL, Telstra already offers coverage to 90% of the Australian population [28].  In countries with unmetered telecommunications pricing (e.g. Australia, Canada, the United States), a second residential line is generally used to keep a line free for telephony.

Wireless and Mobile:

As an alternative to the local loop many of the entrants are offering wireless broadband and optical fiber networks thoughout major metropolliton areas.  Growth in the mobile market has been particularly strong. Currently 64% of Australia’s population use cellular services and is projected to be 78% by 2005. Telstra had phased out Australia’s only analogue cellular network in 2000. Telstra’s new CDMA network was completed around the same time and provides a 95% coverage of Australia. Other cellular companies include Vodafone, and C&W Optus. 3G licenses were awarded to six organizations all of whom are beginning to introduce services [47].

Internet Service Providers:

In the September quarter 2000, the ABS commenced a quarterly survey of all identified businesses in Australia providing Internet connectivity services, except for libraries, Internet kiosks and Internet cafes. The survey includes businesses for which telecommunication service provision was a minor part of their business operation. From the March quarter 2002, the collection frequency of the survey was changed from quarterly to biannual. Table 24.3 shows summary indicators of Internet activity for the March quarters 2001 and 2002 [3]:

• Over the year to the end of March 2002, the total number of ISPs fell from 665 to 571, mainly as a result of a decrease in the number of smaller ISPs (those with 1,000 or fewer subscribers). The number of smaller ISPs declined by 81.

• Points of presence of ISPs fell from 2,310 to 2,131 (by 8%) over the year to the end of March 2002, and access lines decreased from 490,108 to 447,050 (by 9%). These indicators recorded declines in capital cities and in other areas.

• Data downloaded by subscribers were 1,234 million megabytes (MBs) during the March quarter 2002, up from 1,040 million MBs during the March quarter 2001. On average, each subscriber downloaded 290 MBs during the March quarter 2002.

• The number of subscribers increased from 4.0 million to 4.2 million (7%), representing an average of 9.5 subscribers per access line at the end of March 2002.

• Although there was a wide distribution of ISPs across Australia, capital cities accounted for 75% of access lines and 73% of subscribers at the end of March 2002, and 81% of MBs downloaded during the March quarter 2002.

• Increasing numbers of subscribers are accessing the Internet using permanent broadband methods such as Digital Subscriber Line (DSL). The number of subscribers using DSL increased from 27,000 to 60,000 over the year to the end of March 2002, with the number of ISPs offering this service increasing from 52 to 131.

Broadband:

The relatively low number of broadband subscribers in Australia at present, 363,500 is forecast to double during 2003. Broadband growth is anticipated from deployment to meet regional and community needs rather than projects initiated by telecommunications companies. Revenue from broadband services is expected to reach between US$9.8 and13 billion by 2010. As a consequence of the growth in broadband, data communications services should also experience increasing demand.

In March 2002, the Federal Government established a Broadband Advisory Group (BAG) to provide high-level advice on the development of the broadband market in Australia and to conduct a strategic review of broadband policy with a view to stimulating the availability and take-up of broadband.

The Broadband Advisory Group has reported on ways to enhance broadband connectivity in Australia. The Group’s assessment of the importance of broadband infrastructure in supporting industry development, advanced research collaboration, improved ways of delivering health, education and government services, and generally achieving productivity benefits across the economy, is broadly supported, as are the Group’s recommendations. There is also a continued need for coordinated efforts to build and extend advanced research networks as part of Australia’s innovation infrastructure [47].

Broadband Access in OECD Countries per 100 Inhabitants, June 2003:[23]